How to Price a Job: Hourly vs Fixed Price

Underpricing is the most common reason small service businesses struggle. You do the work, the customer is happy, and at the end of the month there is not enough left. A clear way to price a job fixes that, and it is simpler than it sounds.

Step 1: Know your hourly cost

Start with what you need to earn, not what others charge. Add up:

• The pay you want for yourself for the month.
• Your fixed costs: rent, insurance, software, phone, vehicle.
• A small amount for tax and for slow months.

Divide the total by the number of hours you can realistically bill in a month. This is usually far fewer than the hours you work, because quoting, travelling and admin are not billable. If you can bill 100 hours in a month and need 4,000, your minimum rate is 40 an hour.

Step 2: Estimate the work honestly

List every step of the job and estimate the time for each. Add:

• Materials, at what you pay, plus a markup for handling them.
• Travel and setup time.
• A buffer, often 10 to 20 percent, because jobs nearly always take longer than planned.

Step 3: Choose how to charge

Hourly rate. The customer pays for the time you spend.

• Good when the scope is unclear, or the customer may keep changing it.
• Risk: the customer may worry about the final total, so give an estimate or a cap.

Fixed price. The customer pays one agreed price.

• Good when the scope is clear and you have done the job before.
• Risk: if it takes longer, you absorb the cost, so keep your buffer.

A mix. A fixed price for the defined work, and an hourly rate for anything extra the customer asks for.

• This is often the fairest option for both sides.

Step 4: Add a deposit and write it down

Agree the price, what is included and what is not, and how payment works. For bigger jobs, ask for a deposit before you start. Putting the scope in writing prevents arguments about "I thought that was included".

Step 5: Review after every job

When the job ends, compare your estimate with the real time and cost. If you keep finishing late or losing money, raise your price or your buffer. Over a few jobs you will learn which kinds of work you underprice.

Use your tools to keep it consistent

In EzInvoice you can send a quotation with each line priced, turn it into an invoice when the customer accepts, record a deposit and part payments, and track the job through to done in Projects. Wherever you send the quote, make sure it shows the scope and the total. For businesses that sell standard services at set prices, such as a car wash, a clear price list can replace per-job quotes.

A quick checklist

1. Work out your minimum hourly rate from your real costs.
2. Estimate the time for each step and add a buffer.
3. Add materials with a markup, and travel time.
4. Pick hourly, fixed or a mix to suit the job.
5. Write down the scope and ask for a deposit on bigger jobs.
6. Compare your estimate to the real result and adjust.